Farmhouse Style Model Home Kitchen

Is Buying A Model Home A Smart Decision? Here Are The Most Important Factors To Consider

5-Minute Read
Published on March 23, 2021
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Model homes are beautiful – they have to be. They’re the first impression of the builder, the layout of the home, and the foundation on which you’ll dream of yourself possibly living there. Buying a model home isn’t as simple as picking a ready-made house, though. There are certainly ways a model home makes for an easy move-in process, but construction concerns and extra costs can be an issue. If you’re considering buying a model home, here are a few points to keep in mind:

Construction

Because of the pressure put on a model home to attract buyers, it usually features a larger floor plan than the average home and has many upgrades to display the types of features that are possible in the home you decide to buy.

But while the features are obvious, sometimes shortcuts in the construction are not. Is the molding crooked? Does the floor squeak in a particular area? Is the bathtub properly caulked? How’s the drainage system? If you’re still not sure what you should be looking for, it’s important to hire your own home inspector for a full home inspection before closing. You can also hire a third-party real estate agent. They can help you research the builders and their reputation, and suggest the right questions to ask. Some basic concerns include the structure’s age and history (like whether it was used as an office).

Another thing to consider about the construction is the actual size of the home and each room in it. Will your current furniture work in the rooms, or will you have to purchase new pieces? Take measurements during the inspection process so you’ll know.

Location

Usually, model homes are built near the entrance of a new development, so it’s the first house you see. That location could be a deal-breaker if you’re sensitive to noise and activity from the road, cars, etc. If you’re comfortable with daily subdivision traffic, then it’s not a concern, but if it’s an issue, perhaps the model home itself may not be right for you.

If you end up requesting a home be built for you, do you want to be at the end of the street, on a circular drive, or right smack in the middle? How will the house be situated? Will the sun scorch your front window all day, or will it heat up the backyard instead? These are all things you should be thinking about before signing on the dotted line.

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Amenities

You’ll most likely see high-end features such as granite countertops, built-in appliances, lush carpet, and top-of-the-line window blinds or shades. If you want to buy a model home “as-is” with these items included, make sure they’re listed and attached to your purchase agreement if you move forward. Otherwise, the builder will remove them, and you’ll be left with the added expense of seeking these items on your own.

However, keep in mind the cost of these amenities. Usually, the upgrades and extras are considered marketing costs, so you should not be paying a mark-up on these items. Do some research and see how much it would cost to do these upgrades on your own before agreeing on a price for specific amenities.

Subcontractors tend to do an extra good job because they know that the complete look is what generates business. Rather than have you walk into an empty kitchen, they have built-in appliances and great lighting to showcase the room’s full potential. While these extras may be itemized in a brochure or hyped up by the staff, these features come at a price and may skew the reality of the type of home you’ll actually be getting if you don’t purchase the model itself. If other occupants are already in the subdivision, ask if it can be arranged to see the inside of one of those homes as they’ll likely have more realistic features.

Price

If the model home you’re interested in has been the model for that development for a few years, the price should reflect the fact that tons of people have walked through it, used the bathrooms, etc. You have room to negotiate on the price because it’s likely that the floor, heating and cooling systems, and more have been frequently used even though there is no “occupant.”

In addition, the garage attached to the home might have been made into a sales office so that it doesn’t take away from the look of the home’s interior. Confirm that the space they “borrowed” will be converted back into a proper garage at the builder’s expense by outlining it in the contract.

For upgrades that you know will add value to your home over time, spend wisely and negotiate with the builder as you may be able to keep these extras at a reduced price because the home is indeed a model. You could also compare prices with other contractors and services.

However, be aware that certain costs come with a model home. For example, those used appliances might need to be replaced soon but don’t come with the same warranty as those in a new home. The same goes for the home warranty itself. You may find that its warranty doesn’t cover as many years compared to other houses in the development since the model home’s been standing for a while. So, consider the financial pros and cons carefully.

Model Home FAQs

We’ve discussed some of the basic information that goes into buying a model home. Now, here are a few need-to-know answers to take with you if you’re unsure if it’s the right move for you.

How Much Do Model Homes Cost?

Model homes tend to be the last ones sold in their development because an up-and-coming community needs it to lure in buyers. By the time a builder considers selling one, they want to move on to their next project. Couple that with the model’s wear and tear from hosting visitors or acting as a sales office, you usually have grounds for a decent discount. But it’s hard to predict the actual price range for a model home. You can expect a negotiable margin between the model’s asking price and those around it.

Can You Buy A Model Home With The Furniture?

It might be possible to purchase a model home’s furnishings at a discount. While that may be easier than hauling new furniture in, you should keep in mind their history. Since potential home buyers tour the model, those furnishings aren’t brand new and may need to be replaced sooner than you think.

How Do You Negotiate The Price Of A Model Home?

Even if the builders try to hike a model home’s price due to its upgrades and amenities, you should negotiate the price. The best route is to have a buyer’s agent you can rely on during negotiation. They’re aligned with your interests and can help you research ahead of time. Also, ensuring a home inspection by a neutral third-party can give you grounds for negotiation as well.

When Do Model Homes Go On Sale?

Model homes tend to go on sale well after purchases have been made in the surrounding community. Often, you’ll have to negotiate warranties with the builder as a result. This is because the house and its features have been sitting for a while since its construction.

Are Model Homes Cheaper Than Regular Homes?

It depends on your negotiation with the builder. Most builders don’t list a model home on MLS or other listing services, so it can be hard to find the comparable sales. However, you can contact the title company for the data. Remember, you’ll probably negotiate below the asking price.

The Bottom Line

Remember, model homes are designed to draw you in and make you want to visualize yourself living there. It’s important to weigh the pros and cons of moving into the model home or seek different layouts to see what best suits your style. Finding the right home can be a challenge for any home buyer, though, not just those looking into model homes. The best tool at your disposal is information. Learn more about buying a home to make your purchasing process as smooth as possible.

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Call our Home Loans Experts at (800) 251-9080 to begin your mortgage application, or apply online to review your loan options.

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